7th July 2014 - Global Economic & Market Update
Asian Market Data as of 7th July 2014
Moscow MCIEX 1,514.47 (+0.01%) Nikkei 225 15,379.44 (-0.37%)
Hang Seng 23,522.57 (-0.10%)
Shang SSE Comp 2,059.57 (+0.01%)
Markets in Asia started the week out quietly as the weekend saw comments from Christine Lagarde from the IMF suggesting that their global growth forecasts for 2014 may be revised down again. After a strong finish to the week which saw the Nikkei break 5mth highs, today's volumes were low despite the Bank of Japan stating the economy was performing as expected and that even if it was moderate, a recovery can be seen. Markets in China were muted too as this week see's data on inflation and trade which will be a key indicator as to whether the stimulus packages they have implemented so far this year have helped slow down the reduction in growth they saw in the first quarter of 2014.
FTSE 100 6,866.05 (+0.01%) Dax 10,009.08 (-0.20%)
CAC 40 4,468.98 (-0.47%) BEL 20 3,180.12 (+0.62%)
Zurich SMI 8,678.22 (-0.19%)
European markets closed out last week in positive territory for the majority of indexes even as a mixed bag of economic data was released in the Eurozone. With the FTSE staying strong and the Dax back over 10,000 the figures from the Economic Cycle Research Institute came as some surprise. The ECRI stated that inflationary pressure was at a 25mth high for June seeing their EU Future Inflation Gauge at 95.3 for May as opposed to the 94.0 for April. This was in contrast to Markit's monthly data which saw business in the EU grow at its slowest pace in 6mths in June, it did however show that new orders had increased at their fastest pace in June for 3yrs and that this would imply a strong 2nd half of 2014 for the region.
Dow Jones 17,068.26 (+0.54%) NASDAQ 4,485.98 (+0.63%)
S&P 500 1,985.44 (+0.55%)
It was a short week last week in the US as the country celebrated Independence Day and data that showed unemployment down to 6.1% and new jobs added to the tune of 288,000. Both of which were unexpected by the markets. With the Dow closing past 17k for the first time on record, up 2.6% on the year and up over 10,000 points in just 5 years and the S&P 500 on a 24th record close and over 7% up for 2014 its hard to see a slowdown to the bulls run of 2014. With the 2nd half of the year predicted to be substantially better than the first where this will end is the main question of many analysts. As we start earning season this week it would be fair to expect some caution however a Reuters Poll suggests that earnings are forecast to be up 6.2% for the 2nd quarter of the year with the 3rd and 4th quarters expected to be up 10.9% and 11.9% respectively. All this points in the direction for a continued bumper year for investors as the Fed continues its line of asset buying reductions and still looks to keep rates as they are at least for another year, if not longer.
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